Taking Stock

While we’ve written that it’s possible that the former Pathmark unit in Camden, NJ could become Wakefern’s first member-owned PriceRite, the other two South Jersey Pathmark units that had been targeted for closing – in Cherry Hill and EdgewaterPark – were shuttered on September 6. About 350 associates lost their jobs. Parent company A&P also announced that the Pathmark in Howell, NJ will close on October 6 (now that the sales “exploration” process has begun for A&P with the guidance of Credit Suisse, can the painful end of this once great American business be far off?). Another former Pathmark store that recently reopened under a new banner was Weis’ 55,200 square foot Hillsborough, NJ unit which has been totally refurbished and looks great. In November, Weis will open at the site of another former A&P unit in nearby Flanders, NJ, the western New Jersey berg where the Sunbury, PA regional chain once operated (that store is now a high-volume ShopRite). Weis also announced that the new Hillsborough unit, as well as stores in Newton, Franklin and Hackettstown, NJ along with stores in Conshohocken, Doylestown, Norristown (all former Genuardi’s locations) and Lansdale, PA has been added to the retailer’s online shopping service. With the addition of those eight units, Weis’ online service is now available at 14 locations…who likes the Affordable Care Act (“Obamacare”)? Apparently not many people, including the United Food and Commercial Workers Local 1500, which admitted it is struggling to make progress in bargaining a new contract with King Kullen and Stop & Shop (the existing pact expires on September 28). “The Affordable Care Act is presenting tremendous and unprecedented challenges to these negotiations,” said Bruce W. Both, president of UFCW Local 1500. “The complexity of this 22,000 page law, combined with confusing interpretations of the law by various federal agencies, such as the Department of Labor, IRS and Treasury Department, has left union negotiators with no choice but to proceed slowly and cautiously as we negotiate the legally required changes. The one factor that has not changed during these negotiations, compared to previous ones, is our union’s commitment to provide the members of UFCW Local 1500 comprehensive healthcare. For decades the healthcare plans, mutually agreed to between UFCW Local 1500’s union members and participating employers, has provided health insurance to thousands of New Yorkers. UFCW Local 1500’s healthcare plan has been a model of efficiency, achieving better cost savings than for-profit insurance carriers that ensured a large percentage of every dollar spent goes to patient care. Savings in healthcare cost frees up money to negotiate fair wages and secure pensions. The Affordable Care Act has greatly complicated this respected and successful labor bargaining model. It is very difficult to negotiate an entire contract with the fair wages and comprehensive benefits our 23,000 truly deserve with so much time being spent consulting with healthcare consultants on the ACA and bracing for additionally confusing regulations from Washington D.C All our members wanted was what Congress promised them, when this bill was passed: a law that would not require them to change their coverage or their doctors. They did not get that from this law. Regardless of what takes place in Washington DC, the leadership of UFCW Local 1500 is going to fight any effort by anyone to undermine the excellent union contracts our members have fought for and earned over these many years.” Local 1500 is New York State’s largest grocery workers union and about 10,000 of its members work for King Kullen and Stop & Shop covering stores on Long Island, New York City and Westchester, Putnam and Dutchess Counties… a few final thoughts about the recent surprising departures of Giant/Landover president Anthony Hucker and Delhaize America CEO Roland Smith. I was disappointed to hear the news about Mr. Hucker. Anthony is an extremely intelligent and engaging personality who, unlike his predecessor, Robin Michel, was genuinely liked by Giant’s associates. There’s no question that the transition from his expertise in strategic management to a more operational-driven job was a challenge, but Anthony worked hard to make Giant a better place to work and a more visible presence in the community. In the end, it’s always about “the numbers” and clearly Giant has been struggling due to many factors that include economic and competitive issues and some that involve Ahold USA transitioning into a changing organization following the integration of many functions to Carlisle, PA. There’s also a new management structure in place led by James McCann, another talented Brit with an extremely high level of smarts and perhaps a different vision and makeup than the person who originally helped choose Hucker – the now retired Carl Schlicker. Sometimes the chemistry doesn’t work out, particularly if business at Giant (and for many retailers in the Baltimore-Washington market) isn’t clicking on all cylinders. With the search for a future fourth president in five years now under way, Giant not only must deliver better results, but it needs more management stability. We wish Anthony the best of luck in his future endeavors. As for Roland Smith, clearly the changing of the guard at parent company Delhaize Group (and subsequent loss of control of day-to-day U.S. operations) was the probable cause of his exit. It’s hard to evaluate Smith’s tenure, which lasted less than a year. While we heard the moniker “Chainsaw Jr.” tossed around by associates and vendors, it’s only fair to note that Smith was brought in to tighten the ship (he sold DA’s losing unit in Florida to Winn-Dixie) and change the culture, so “whackin’ and hackin’” would have been the first offensive deployment for any new leader. And while the trimming of the executive team and the brand “repositioning” of Food Lion has helped same store revenue and earnings, there’s so much more that’s needed to restore most of the Delhaize America store fleet back to sea level. It’s difficult to fathom any supermarket executive being able to successfully complete that task, given the damage that the Belgian retailer has inflicted upon it is flagship Food Lion unit over the past decade and the ferocity of the current competitive environment. Ask yourself this question objectively: given the convenience of its locations and the recent pricing and merchandising upgrades, is there a significantly more compelling reason to make Food Lion your primary shopping destination today than there was 18 months ago? Even Beth Newlands Campbell, who late last year was named Food Lion president replacing the ousted aforementioned Cathy Green Burns (one of Smith’s first moves), acknowledged in a recent Charlotte Observer interview: .“we have to get better.” Clearly, Newlands Campbell, a 26 year alumnus of sister firm Hannaford, gets the big picture, admitting that “…there’s an imperative to set us apart, You can’t be middle of the road.” But talkin’ it and walkin’ it in Food Lion’s case are still miles apart. Somehow, me thinks that a new non-American CEO (Frans Muller) based in Brussels, isn’t going to offer Delhaize the best opportunity to improve its U.S. business…more obits than usual to report this month and that’s never a good thing. Passing away last month was Joe McCarthy, one of the great old line warriors in the food business. McCarthy, who began his career with First National Supermarkets in the late 1940s after graduating from Villanova, spent 30 years at that now-defunct chain, rising to the position of senior VP. He later joined Grand Union for a four year stint (1977-1981) and spent the last nine years of his career with A&P where he started as senior VP of the company’s Metro New York group and later became EVP and COO for the entire Tea Company. Joe McCarthy was a no nonsense, tough, old school executive who knew virtually every aspect of the grocery business, and despite his gruffness, was always kind and helpful to me when I first began my career in 1974. He died in Naples, FL at age 91. One of the great modern crime novelists of our time, Elmore Leonard, has also died. Elmore was still writing almost every day (he wrote all of his books in longhand on unlined yellow pads) until nearly the end. His volume of work, which began in 1953 with “The Bounty Hunters,” was one of the most prolific and interesting of the past 50 years. Among his many novels which were ultimately made into motion pictures were “Out of Sight” (1998), “Jackie Brown” (1997), “52 Pick-Up” (1986) and one of my all-time favorite movies “Get Shorty” (1995). Born in New Orleans and raised in Detroit, where he lived most of his life, Leonard’s spare writing style and gritty realism made most of his novels a fun and absorbing read. Leonard was 87. And although he wasn’t very well-known and only recorded a limited body of work, it’s sad to note the death of rock and roller Jackie Lomax, 69, one of the first artists to record on Apple Records, the label founded by The Beatles. In fact, Lomax’s first album on Apple – “Is This What You Want?” – included the excellent single “Sour Milk Sea” penned by George Harrison. Among those who played on the album were Harrison, Paul McCartney, Ringo Starr and Eric Clapton. The album is kind of hard to find, but worth hunting down if you’re a fan of the pop-rock genre that was an important part of the late 60s-early 70s music. Also passing on was Robert R. Taylor, 77, one of the greatest (and most unsung) entrepreneurs of the past 50 years. Among dozens of enterprises he was involved with, two stand out as genius.In the early 1980s, for $1 million, Taylor acquired the rights to Obsession, a fragrance developed by fashion designer Calvin Klein that was failing miserably. Taylor bankrolled a sexy, glitzy $15 million ad campaign that hyped Obsession – “Between Love and Madness Lies Obsession” – that amassed $30 million in sales in 1985, the first year it hit the stores. In 1980, a small Minnesota company he also founder – Minnetonka Corp. – introduced a revolutionary new product that he developed in his home after years of testing – Softsoap. Fearing that his formula would soon be replicated by industry giants P&G, Unilever and Colgate-Palmolive, Taylor made the ultimate “bet the company” move. He secretly ordered 100 million of the little plastic pumps that were at the time used to dispense various lotions. That tied up a full year’s production of the pumps’ only manufacturers, giving Taylor time to establish his brand without rivals. In 1987, a few years after the soap giants caught up, he sold Softsoap to Colgate for $61 million.”The best way for an entrepreneur to compete in today’s marketplace,” he told the New York Times shortly after the sale, “is to avoid competition – or at least find ways to circumvent it.”